Mysterious Moody’s Move

by Roger Koppl

The Christian Science Monitor reports that Moody’s is considering downgrading US government debt.  (HT: Mario Rizzo)   Is that a credible threat?  Moody’s is one of ten “Nationally Recognized Statistical Rating Organizations” (NRSRO) officially recognized by the SEC.  Moody’s, S&P, and Fitch are the big three and do most of the rating.  Would they downgrade the same entity that ensures their continued monopoly power?  Why would they make such a threat in the first place?   What is the public choice explanation for Moody’s (empty?) threat?

News Flash! Water still runs downhill only

by Roger Koppl

Today’s Los Angeles Times reports that “Businesspeople join the ranks of climate treaty proponents.” This support is old news as I noted last May in a post entitled “Water does not run uphill.”  The L A Times report nevertheless express surprise saying, “an unlikely batch of advocates has emerged to champion a new global warming agreement: businesspeople.”  And yet the same article contains clear statements that many big businesses see profit opportunities in a climate treaty.

Climate laws are barriers to entry.   Continue reading

Who will capture forensic science?

by Roger Koppl

Friday I spoke at a conference on  Forensic Science in the 21st Century: The National Academy of Sciences Report and Beyond  The report was a humdinger.  It says,  “The bottom line is simple: In a number of forensic science disciplines, forensic science professionals have yet to establish either the validity of their approachor the accuracy of their conclusions, and the courts have been utterly ineffective in addressing this problem.”  That’s strong stuff.  The report did a good job at identifying the unscientific nature of much of forensic science.  The report neglected problems that can arise in nuclear DNA analysis, but it is still impressively hard hitting.   Continue reading

Regulatory Failure

ThinkMarkets is very pleased to present the following post by the first of our guest bloggers, Jerry O’Driscoll.  Jerry is a senior fellow at the Cato Institute. He has written on a wide variety of subjects in monetary economics and on Hayek’s economics. He and I are also coauthors of The Economics of Time and Ignorance (Routledge, 1996).  


by Jerry O’Driscoll


Ludwig Lachmann frequently remarked that people learn from experience, but asked “what do they learn?”  The recent financial crisis illustrates his point.  For many, it has been labeled a failure of free-market capitalism. In reality, it was a systemic failure of regulation.  Indeed, I would argue the very idea of government regulation of industry has been tested and failed.


With the exception of health care, financial services is the most highly regulated industry in America (and, generally speaking, in all developed countries).  No segment of the industry escaped regulation.  For commercial banks, there were multiple layers of regulation: the Fed; the Office of the Comptroller of the Currency (part of Treasury); the FDIC; and the SEC.  For state chartered banks, a state banking regulator substituted for the OCC. Continue reading

Interventionist Romance

by Chidem Kurdas


James Galbraith puts a dramatic spin on recent history in his new book, “The Predator State.” He argues that the American government was used to plunder public resources for private gain. That certainly rings true, one obvious new example being the pork projects added by Congress to the financial bailout bill. You might think Mr. Galbraith favors limits on the state. 


No such thing. He calls for more government with nary a mention of restraint. The twist is that he attributes the looting of the Republic almost exclusively to Republicans.


“Today, in the great policy house of the conservatives, there are only lobbyists and the politicians who do their bidding. There are slogans and sloganeers. There are cronies and careerists,” he writes. Continue reading